Address to Faculty Senate September 13, 2005 Jared L. Cohon

State of the University, 2005 Students Sponsored Research Financial Highlights Capital Campaign Highlights and Updates

Students

Overview of the Freshman Class

SAT Score Graph

Fall 2005 Freshman Enrollment - Pittsburgh Class Size International Students –Non US Citizens 228 (17%)156 (11%)216 (15%) Minorities –African American –Hispanic –Native American –Sub-total173 (13%)157 (11%)150 (11%) –Asian –TOTAL646 (48%)615 (44%) 490 (35%) Gender Women533 (39%)512 (37%)537 (38%) Men834 (61%)869 (63%)885 (62%)

Council of Graduate Schools Survey of 126 Universities % Change ’03 to 04 % Change ’04 to ’05 All international students -28%- 5% China-45%-13% India-28%- 9% Korea -14% 0% Selected Fields Engineering-36%- 7% Life Sciences-24%- 1% Physical Sciences-22%- 3% Business-24%- 8% CMU SCS Ph.D.-15%-18% CIT Ph.D. -21%-16% Decline in International Student Applications for Graduate Study in the United States

BusinessCSTotal Applications Admit Enroll Gender: 30 women, 18 men Citizenship: Egypt-3, Kuwait -1, Pakistan-1, Saudi Arabia-1, UAE-3, Qatar-37 (77%), USA-2 Qatar Campus Admission Data – Fall 2005

Sponsored Projects Revenue (in millions) Note: Includes both direct and indirect sponsored project revenues Sponsored Projects Revenue

FINANCIAL UPDATE

FY05 Budget FY05 Operating Budget Revenues$ Expenses Results of Operations$ (2.3)

Endowment Values

Rates of Return

FY 06 Budget Challenges - Revenues FY06 budgeted undergraduate tuition increase of 3.26% is the smallest increase in more than 25 years. FY03 endowment distribution ($41.3M) was 7.5% of operations FY06 budgeted endowment distribution ($36.1M) is 5.1% of operations Gift revenue utilized in operations is projected to decrease as cash receipts are directed toward endowment and restricted net assets –FY05 Forecast to FY06 Budget reflects $2.5M decrease –FY03 Actuals to FY06 Budget reflects $10.5M decrease

Budget Challenges - Expenses With the rise of interest rates and the $50M swap transaction in FY2005, interest expense is increasing Significant increases in electric rates resulting from industry deregulation - $1M increase FY05; $1M increase FY06 Increased investment in University Advancement for the capital campaign - $10.4M of incremental expense in Operating Budget over FY03 Disproportionate growth in the cost of health care benefits –FY03 to FY06 salaries have increased 26% while benefits have increased 64% ($35.1M) –Impact of the increase in health care costs not passed to employees, and not recovered from sponsored projects, from FY03 to FY06 is $9.5M on operating budget

Capital Campaign (As of June 30, 2005) Phase I:7/1/ /31/04 Goal: $130 million Raised: $211 million Phase II: 1/1/05 - 6/30/08 Goal: $500 million (cumulative) Raised: $229 million (as of 6/30/05) Phase III:?

Fundraising Progress by Fiscal Year Projected vs. Actual (in millions) As of June 30, 2005 Preliminary Report Includes all cash and commitments received FY03-present—most but not all of which counts in campaign totals. FY03: $42M in FY03 commitments—gifts made in anticipation of the campaign—count toward campaign progress. FY04: Formal campaign counting period begins. All FY04 commitments counted in campaign. FY05: $10M from Qatar Foundation, included on this report (cash received), is not yet being counted in campaign totals.

Gift Range Prospects Identified Gifts Needed (Phases One + Two) Dollars Needed # Gifts Pledged/ Received Total Dollars Pledged/Received Principal ($5M+) 8619$178,000,0006$98,555,787 Leadership ($1M - $4.99M) 21270$124,200,00032$62,236,661 Baseline ($50K to $999K) 7,203850$152,700,000261$54,499,101 SUBTOTAL7,501939$454,900,000299$215,291,549 Under 50KMany $45,100,000Many $13, 916, 426 TOTAL $500,000,000 $229,207,975 Draft Gift Table – Phases One plus Two – Goal $500M (Projected End Date 6/08) by Cumulative Giving As of June 30, 2005 Preliminary Report Figures above do not yet include $10 million from Qatar Foundation

$54,400,000 $53,100,000 $138,000,000 $164,700,000 $6,928,692 3% $81,852,333 36% $8,489,845 4% $26,120,727 11% $105,816,378 46% Expendable Endowment Facilities Undesignated Unrestricted Campaign Goals by Purpose As of June 30, 2005 Preliminary Report Projected Total New Campaign Endowment Expendable Facilities Centennial Campaign (total raised $410.2 million) Facilities Expendable Endowment Undesignated Phase I & II: $229,207,975 (pie shows total commitments; see cash totals below) Paid to Date Facilities $24,997, % Endowment$35,112, % Expendable$66,199, % Undesignated$1,335, % Unrestricted$6,392, % 34% 40% 13%

HIGHLIGHTS AND UPDATES

1.Harvard University Princeton University 3.Yale University 4.University of Pennsylvania 5.Duke University Massachusetts Institute of Technology Stanford University 8.California Institute of Technology 9.Columbia University Dartmouth University 11.Northwestern University Washington University in St. Louis 13.Brown University 14.Cornel University John Hopkins University University of Chicago 17.Rice University 18.University of Notre Dame Vanderbilt University 20.Emory University 21.University of California – Berkeley 22.Carnegie Mellon University University of Michigan University of Virginia *Source: “America’s Best Colleges 2005,” US News and World Report. 8/26/05 25.Georgetown University Best National Universities AY2005

AY2005AY2006 Overall:#6#5 MIS:#2#2 Ops. Management:#3#2 Quantitative Analysis:#2#2 Finance:#10#9 Supply Chain Management:#6#5 General Management:#21#24 Entrepreneurship:#20#19 *Source: “America’s Best Colleges 2005,” US News and World Report. 8/26/05 Undergraduate Business Rankings

AY2005AY2006 Overall:#8#8 Computer:#5#3 Electrical:#10#10 Chemical:#14#14 Civil:#14#13 Environmental:#16#13 Materials:#9#11 Mechanical:#12#13 *Source: “America’s Best Colleges 2004,” US News and World Report. 8/26/05 Undergraduate Engineering Rankings

- Controversial Speakers Policy Review Committee - Adjacent Policies: Free Speech & Assembly & Carnegie Code - Faculty (5), Staff (3), Grads (2), Undergrads (2), Community/Alumnus (1) - Bill Brown to Chair - Town Meetings & University Benchmarks - Proposed Policy & Procedure Changes by January - Meeting with United Jewish Federation - University Lecture Series Advisory Council - Focus on Diverse Perspectives & Balance - Wrap-around Programming Controversial Speakers

- 24 Undergraduates & 4 Graduate Students In-house - Tulane University, plus Loyola, University of New Orleans & Xavier - Academic Department Support - Students, Faculty & Staff Offering Housing - Guest Students with Tuition Waiver - Carnegie Mellon Students/Families Impact & Support - 33 from Area & 8 Directly Impacted - Community Service - Central Website - Campus Events - Planned Service Trips: Winter & Spring Break Katrina Response